If an investment (where the costs are incurred before then profits)makes sense when the interest rate on the borrowed money to pay for it is 10%
A)an increase in the interest rate will cause the investment to lose money.
B)an increase in the interest rate will cause the investment to be less profitable, but it still may make money.
C)a decrease in the interest rate will cause the investment to lose money.
D)a decrease in the interest rate will cause the investment to be less profitable, but it still may make money.

Question

Quizplus · Accepted Answer

If the interest rate increases, the cost of borrowing money to finance the investment will also increase, reducing the potential return on the investment. However, it does not necessarily mean that the investment will lose money. On the other hand, if the interest rate decreases, the cost of borrowing will decrease, making the investment more profitable, but it still may not guarantee a profit.

If an Investment (Where the Costs Are Incurred Before Then